Tuesday, January 15, 2013

In the aftermath of the initial panic that occurred after 2006, when conventional petroleum resources plateaued, perhaps permanently according to the IEA 2010 report, (p124), more and more people started to question the viability of our global economy in its current form.There were a few contrarian voices, which said that there is plenty of oil in the ground, we just have to get to it.At first they were ridiculed by many who saw them as eternal optimists.Some people argued that the global economy cannot sustain the price level needed to support the long-term production of expensive sources of oil, such as oil sands, shale oil, and deep water fields.We have been living with crude oil prices in the $100 range for almost half a decade now, and while it may not be pleasant, given that many decades worth of infrastructure were built for $20 oil, we are still kicking around.Others argued that given the low rate of energy return on energy invested unconventional sources will not support the global economy.Once again, it is a pain that we are faced with an industry which for a century now has been marching towards lower returns on energy invested, but as long as there is a significant net gain, it will be done. We are benefitting, even when we achieve a 4/1 ratio, which is what we get out of oil sands, and shale oil.It is quite pathetic compared to the 100/1 ratio that some of the great conventional fields in Saudi Arabia and in Texas yielded early on, during the initial process of tapping some of the world's biggest and easiest to produce fields, but unconventional fields help us stay afloat.There is of course also the question whether there is a long-term net benefit to us, given the environmental degradation involved in the production process. I believe society as a collective already decided a long time ago to assume that we are getting a net benefit out of it, so environmental concerns will not be an impediment to producing unconventional oil.

As a result of proving the immediate concerns of the peak oil advocates to be irrelevant at least given the current circumstances, the new mainstream consensus is now that we are not looking at energy constraints on the economy in the near future, instead, we are witnessing the transition to a new era, based on bringing online huge new resource deposits.There is more and more talk of many trillions of barrels in potentially recoverable resources, in the form shale oil deposits, as well as kerogen, which is often mistakenly talked of as shale oil, probably done on purpose to give people the false impression that the resource is within technical reach.So, increasingly people are given the impression that the new era of unconventional resources is giving us a chance to reset the oil age back to the early days, when we were just starting to tap the world’s great fields, and we are back to looking ahead at decades of plenty.To put things into perspective, the world’s entire official proven oil reserve stemming from conventional fields is estimated at somewhere between 1.3 and 1.5 trillion barrels.This number is itself under question given reserve inflation that seems to be occurring due to OPEC politics, which encourages members to seek influence within by inflating their reserve estimates.So the bottom line is that the new perception that currently dominates is that in the US alone, there is now more oil waiting to be recovered than in the entire world.All that needs to be done according to some talking heads, pushing their own agendas, is remove the environmental and other policy barriers and the prize is ours to take.

Before I go to the analysis of the Eagle Ford oil and gas deposit in order to try to shed more light on this issue, I want to point out a few facts in regards to the prospects for these US unconventional resources.First of all, it is estimated that there is a 2-3 trillion barrel shale oil resource base, part of which is already being developed in the form of shale oil.Of that immense resource base, it is estimated by the USGS that about 1-2% will be recoverable given current technology and recent price levels.Many people jumped to assume that technological innovation just unlocked that 1-2%, so given the fast paced change in technology we are witnessing currently, much more will be ultimately recovered, perhaps as much as 10-20%, or somewhere around 500 billion barrels.My response to that is that anything is possible, but at the moment we have to take a step back and recognize that not technological innovation made these resources available, but a five fold leap in average yearly oil prices that happened in the last decade.The fracking technology and even horizontal drilling have been around for a long time now, so no new major innovation was involved.Given technical economic reasons, which in my view are now fully demonstrated by recent history, it is unreasonable to expect that we can successfully overcome another major permanent rise in oil prices any time soon to give us another boost in the form of the addition of more reserves.Perhaps many decades from now, who knows, but certainly not within my lifetime.So, in the absence of some innovation at current price levels, the 25-50 billion barrel addition to US recoverable resources is all that the US will get out of this resource.It is a huge resource for sure, but put into global perspective, it is only one to two years worth of consumption.

As far as the often cited huge potential of the kerogen deposits, it is something that has been contemplated for decades now, but it seems market price mechanisms are not enough to unlock this resource, because pilot projects have yet to demonstrate that it is possible to get a significant net energy return on energy invested out of it.All the talk about government policy being the main obstacle in this particular case is hot air and nothing more.Here we truly have a technical challenge, and at the moment, there is no indication yet that it is about to be overcome, so no use even spending time discussing it. (link here for those who want to read more about recent attempts to find a way to produce this resource)

Eagle Ford:

Given the current rush to proclaim the permanent defeat of peak oil, courtesy of unconventional oil and gas, I chose to look at one such field and analyze to the best of my abilities its future, based on currently available information.

Basic Facts:

-Eagle Ford contains the equivalent of about 7.3 billion barrels of oil according to the US Department of Energy, made up of crude oil, NGL’s and natural gas, which are technically recoverable.

-Crude + NGL’s make up 3.3 billion barrels of the resource.

-Natural gas makes up the rest, which is about 4 billion barrels.

-At current market prices, the entire recoverable resource is worth about $330 billion, Asuming a price of $90 per barrel for crude oil, and a much lower $60 per barrel price for NGL's and $20 per barrel for natural gas.

-Current estimates put liquids production at about 900,000 barrels per day by 2020, which would mean that by that time, about 2/3 of the recoverable liquid hydrocarbons in place will be depleted. There are some more outlandish estimates ( such as this one) that put oil and gas production from the field at 1.4 billion barrels for the year 2020, or 4 million barrels per day.

Net collective profit for the field:

Many upbeat reports have been trumpeting the surge in investment in this field, and the resulting benefit to the local economy.Recent analysis puts yearly investment into the field at about $30 billion between the years 2012-15.That projected investment alone ads up to $120 billion, which many were eager to proudly point out that it adds up to more than the entire investment in Kazakhstan’s Kashagan field development, which contains about 15 billion barrels of oil.Another $30 billion or so have already been spent up to 2012.Money will have to be spent after 2015 on developing and maintaining production.According to current production estimates, of the 7.3 billion barrels of recoverable oil equivalent, by the end of 2015, only an estimated 1.3 billion barrels will have been produced, which means that much more drilling and infrastructure building will still be needed going forward to drain the entire estimated recoverable resource.It is reasonable to assume that it will take up to 2030 to recover most of the reserves, with small scale production afterwards going after what is left.

Given that $150 billion will be cumulatively spent by the end of 2015, it is hard to understand how the recovery of the currently estimated recoverable resources can be ultimately profitable.Assuming that between 2015-20, the yearly average investment will decline to $20 billion, and then decline to $10 billion per year between 2020-30, we already end up with total spending at $350 billion, which is more or less equal to the estimated value of the resource at current prices.

We should remember however that by 2030, the field will not be entirely drained, so assuming that 90% of the estimated reserves will be produced by then, we get about $350 billion in expenditures and about $300 billion in revenue.These results are just a rough estimation, based on many unknowns, including actual level of yearly expenditures going beyond 2015, long-term commodity market prices, company management, unforeseen environmental costs, royalties owed to government, technological changes, unforeseen geological challenges, and other unforeseen factors.The bottom line is that it is clear that there is a good chance that the development of this field will not lead to a net collective profit for the developers.

Something has to give:

In the absence of a large increase in the ultimate level of recoverable resources, it is hard to see how even the 7.3 billion barrels of oil equivalent will be extracted in the end.Some may argue that surely technological innovation will come to the rescue of this situation, and provide with much cheaper and more effective modes of extraction, which will help yield more hydrocarbons at a lower price.I should point out again that the current rush to shale oil and gas is the result of market price mechanisms, while the main technological innovations employed predate this rush.There is always a possibility of technological breakthroughs, but there is currently absolutely no reason to expect this to happen.In the absence of much lower extraction costs, much larger ultimate recovery volumes than currently estimated, or much better average prices than we have currently for these hydrocarbons, it is reasonable to expect that soon after the most profitable spots within the field will be developed; the rest will be left unexploited.This of course means that the opposite of what is widely expected currently will happen, which is that a large portion of what has been deemed recoverable will be left in the ground, so Eagle Ford will ultimately produce less than 7.3 billion barrels, not more.

Some may argue that the market will come to the rescue with higher prices.Many people who adhere to the peak oil theory, initially believed that we are headed towards $200 a barrel or more for petroleum. That initial reaction, as a response to the plateau in conventional crude production in 2006, including the prediction coming from renowned Canadian economist Jeff Rubin, was obviously flawed.As I pointed out in an article written a few months back entitled “The Ceiling”, the current economy shows strong signs that it cannot stomach prices much higher than $110 a barrel.Demand destruction seems to set in, every time the market pushes for those price levels for a sustained period of time, which then leads to lower prices again.

Conclusions:

The people who are now capitalizing on the current trend of unconventional oil and gas production, in order to reinforce their argument that we will have plenty of hydrocarbons forever, therefore there is no need to change anything fundamentally in our direction forward, will get to say “I told you so” for perhaps just a little over a decade more, before they will start being faced with the need to backtrack a little on their fabulously inflated claims of many decades or even hundreds of years worth of hydrocarbon plenty. This is unfortunate because total liquid fuel production will plateau, just as conventional crude did about six years ago, and we need to be prepared. Preparing for that event can take decades, so it is a shame that we are failing to realize that all that these unconventional sources are giving us is a second chance on which we must jump as quicly as posible.

Eagle Ford is perhaps the best example of what is ahead of us in the absence of a technological miracle which will unlock substantially more than the 1% of the crude oil currently in place in the field.It does not sound like a huge task having to increase recovery rates in a field from 1% to 2%, or more.Truth is however that there was no technological breakthrough involved in releasing that 1% either, so there is no reason to expect that much more will be produced, although, we have to admit that anything is possible, and we should never count out human ingenuity, which is by far our most important potential resource as I often stated.

Given what we know about the field and its current development path, in the absence of a great change in one of the main variables, such as an increase in ultimate recovery, a great leap in prices, or a great technological breakthrough, which will decrease development costs, we should expect the peak in liquids production to happen around 2020, by most estimates at a rate of about 900,000 barrels per day.By that time, 2/3 of the original recoverable liquids in place will have been produced, which means a very fast rate of production decline from that level, especially if by then many companies will realize that it is time to either cash in on having exploited the sweet spots, or as will be the case for some companies, cut their losses.

Other similar fields, which are currently contributing to the hysteric swing towards optimistic euphoria, such as the Bakken will likely experience similar production schedules.Collectively, in the absence of human ingenuity causing a real breakthrough, which does not seem to be currently imminent or even to be expected, the fracking revolution will cause a bump in production which started in 2008, and it will end sometimes between 2020 and 2030.On the way down, it will be very painful, just as it will be a great boost to the US economy on the way up.In fact it may be the only bright spot going forward, so we can enjoy it while it lasts.We could enjoy it and worry later, or we could put some of our human ingenuity towards coming to a collective realization that, unconventional sources of oil and gas being tapped worldwide are only enough to cover the potential growth in demand coming from what seems to be a permanently anemic global economy for perhaps two decades.If we fail to come up with better ways to manage the global economy by the time this bump in production ends, we will be left with nothing else except prayer for a technological miracle, because the market has already played its hand a decade ago.

Tuesday, January 1, 2013

With our greeting of the New Year, comes the first anniversary of my book release, as well as the start of my blog.Looking through my work as I occasionally do, there is one regret I have, which is that my book contains far too many grammatical mistakes.I sincerely hope that it did not inconvenience too much those who read it, for the content itself, I feel has much to offer.I may have made some beginner’s mistakes in terms of the book’s style, which shall serve as a great lesson, if I will ever do another project, but looking back at what I wrote, it is becoming ever more clear that my view of our world and its most likely political and economic evolutionary path, seems to be proven quite accurate so far (which is very unfortunate for humanity and the planet we inhabit).

On the Economy:

Looking back, I have to remind myself that while the publish date of the book was December, 2011; I started researching and writing in 2010.Some of the material and data I used was last updated in 2009.Yet, when it comes to the evolution of the world’s economy, I seem to be more accurate than large prestigious organizations such as the IMF, World Bank, Goldman Sachs and other big boys and girls involved in forecasting economic trajectories.On page 255 for instance, I stated that the US will only see growth rates during the good years, in other words during the years of recovery out of a recession; of between 2-3%.Most establishments have been predicting growth to pick up in just a few years to 3-4%.That level of growth is proving ever more elusive, since it is always bumped further down the road by forecasters.In 2011, growth was 1.8%, for 2012, it will be about 2% and the latest forecasts now predict about 2% for 2013.I also published an article in March, 2012, which went into analyzing in greater detail the world’s potential for growth for the next few decades.So far, I have to say that my approach has produced a far more accurate prediction than what the big boys had on offer.There is little out there on the horizon to suggest that I will be proven wrong in the future.Global growth since 2008 averaged less than 3%, which is significantly slower than what we became accustomed to in the 1995-2008 periods, since average growth averaged over 4% in those years.

As far as government finances go, there is further deterioration of the situation in the western world, on which I spent the whole of chapter nine, entitled ‘Western governments; the ultimate sub-prime borrowers”, explaining why we should expect our governments to face increasing difficulties in meeting the needs of society, which need to be addressed if we are to keep social stability.The EU is finding out the hard way that in the current global growth environment we are in, trying to fix the debt issues by simply cutting spending or raising taxes, can actually lead to a faster rate of deterioration of the debt/GDP ratio, due to falling revenues as a result of the cuts.In the US, they did not start addressing the $trillion + deficits yet, but the only alternative to ignoring the problem is the same failing approach that is currently being tried in Europe.That is why I pointed out throughout the book the fact that in the absence of a push to restructure fundamentally the entire global economy, by changing the way we approach global trade, we will not be able to exit the current trap we are in.In fact, we will sink deeper and deeper, and the fiscal problems of the western world will eventually lead to all out economic and social collapse.It may take a few decades for this to happen, but it will happen if we fail to act soon. 2013 will not bring much improvement on this front.

On our structural Institutions:

I think the failings of our basic local, national and global institutions are quite obvious.Americans should know all about failing institutions by now.Their government is failing to make basic decisions such as raising the debt ceiling, or agree on taxation and spending policies.The so called “Fiscal Cliff” is just the latest example.

The three main credit rating agencies: S&P, Moody’s and Fitch, continue to be failing institutions in my view, which I specifically pointed out in chapter seven, called “Risk assessment and risk management”.The role they played in causing the 2008 crisis was instrumental.They rated mortgage backed securities as AAA, as well as Greece’s sovereign debt at investment grade level, which we all saw how off the mark they were in both cases. On the other hand, S&P just downgraded Hungary’s rating another notch, taking it deeper into non-investment grade territory, while just a few days later, it was revealed that Hungary’s debt/GDP ratio improved from a high level of over 80% reached last year, to about 75% this year, due to smaller deficits as well as its currency strength.Hungary was one of just a handful of nations out of the 27 members of the EU, which had an improving debt/GDP ratio over the last year.It is hard to see how these ratings agencies, which investors depend on to navigate through all the data out there can still be considered to be anything but failed institutions, either due to competing interests, or simply due to incompetence. Yet we are also failing by not serving them with a serious downgrade by simply no longer using their guidance as part of our charters, which commit many investors to relying on these ratings.

On our cultural institutions:

Chapters ten to twelve of my book were dedicated to culture, because it is important to realize that it is the base of everything. Therefore, achieving cultural change could solve many problems which we otherwise have a hard time dealing with.On my blog, I wrote an article entitled “Mitt Romney & Fareed Zakaria on economics and culture ”, which was a rebuff to Fareed’s statement that culture is not a very important factor in economic development and adaptation.I pointed out that in chapter ten of my book, I identified a clear link between economic evolution and culture by looking at all non-former Soviet communist countries in Eastern Europe and their economic development since the collapse of communism.The mainly Orthodox Christian countries of the Balkans are all under-performing their mainly Catholic peers of Central Europe when measured by GDP per capita, or by using the HDI index.There is no overlap between the two groups, despite the fact that there was no clear starting point advantage, which we can identify, whether we are looking at the physical or human capital they inherited, or by looking at structural institutions they had during the communist era, which might have served as an advantage or disadvantage.So culture in my view is definitely one of those issues that have been greatly neglected in the last few decades, due to our inability to effect cultural change.

Our cultural values in the Western World are definitely failing us.I pointed out the inability of politicians in the US to deal with issues such as the fiscal cliff, and such, but we should not forget that they are the product of the collective culture of the American electorate.Ideological partisanship seems to be more accentuated than ever.Whether one sits down to talk with someone leaning left or right, the one thing they have in common is that they no longer have the ability to differentiate between good idea and bad idea.Ideas coming from their own ideological corner automatically qualify as good ideas, and they come up with arguments to support them, even if they do not necessarily wholeheartedly believe in their own arguments, often based on conscious selection of facts and data.Exchange of ideas has become impossible between the two sides and this spells our doom, because we are faced with intellectual stagnation, just at the time when we need fresh ideas to deal with our economic stagnation and malfunction.As the year 2012 passed, we see this failure happening in the Western World, whether one looks at Europe, Canada or the US.Ironically, there seems to be a very strong belief in the values we hold, even though they are clearly failing us. I pointed out in the book that we need a cultural revolution no less intense than the European Enlightenment, which helped us transition from a world dominated by feudal forces and the clergy, to the world we have today, now more than ever, because the only alternative is collapse.One year after I started my blog and published my book, it saddens me to admit that we are actually farther away from realizing the need for this Cultural Revolution in the West.It is the classic story of failure, which history recorded over and over again, yet despite our modern society’s ability to piece together the facts related to humanity’s past, we are unable to learn and realize our own failure to continue to adapt our culture to the needs that arise.

Some short-term good news:

The one constant story which gave us hope of continuing on with our way of life, despite the crisis that started in 2008, has been the development of unconventional sources of hydrocarbons.In the aftermath of the plateau in global conventional crude oil production in 2006 as confirmed by the IEA in 2010, things looked rather grim.The maximum potential global economic growth, without any growth in liquid fuel supplies is about 1.5% per year, which compared to 4%+ we saw on average in past years and decades, would effectively mean the end of today’s economic system as we know it.Remember that the 1.5% is only the maximum potential, but in reality, it would be much worse.A complete meltdown of the global financial system would be imminent within just a few years after the event of stagnation or decline in liquid fuel supplies.Since 2006, the global economy did manage to grow at around 3% on average, and it is largely due to the growth in unconventional supplies of liquid fuels. For every 1% growth in liquid fuel supplies, we can expect a 2% growth in addition to the 1.5% potential growth rate which we can expect to have even in the absence of any growth in liquid fuel supplies.According to the EIA and IEA data, total liquid fuel supplies have grown by almost 1% per year since 2006, and we should expect this trend to continue in the following years if not decades, which gives us a maximum potential rate of average yearly global GDP growth of about 3.5%.

2012 saw a flurry of great news, especially for the US in regards to the development of unconventional liquids as well as gas.Headlines, such as “US to be top oil producer”, or “net energy exporter” dominated the public sphere.There were even more optimistic headlines, such as “world facing oil glut” and other such misguided statements.There is also the good news of continued well-paying job gains in the oil and gas industry, as the frantic race to drill more and more to not only replace the fast depleting fracked wells, but to also grow production is giving more and more people the opportunity to make a good living.The United States is once again at the forefront of this, but the practice of hydraulic fracturing is spreading all over the world, and it will mean jobs for people.For 2013, and for many years after, this will be a continued source of good news in an otherwise grim world.It is however important to remember that while the news may be good, for the long-run it is way overhyped, as I will explain in the next article in two weeks time, by examining one field in the US, and its real prospects, versus the industry’s claims.

Even though hydraulic fracturing will continue to be a good news story for 2013, and years after, it is important to also understand the true nature of this story for its longer term implications.First of all, it did not happen as a result of innovations but as a result of price.In other words, the thing that kept hydraulic fracturing of shale oil and gas from becoming a viable technique in the past was the cost involved in production, which was above the market price of the product.Since the plateau of conventionally produced oil in 2006, the price floor for oil has moved high enough to allow this technique to be profitable.The new price range oil is trading in is not only beneficial to hydraulic fracturing, but also to the oil sands projects in Canada, the deep water projects all over the world, Venezuela’s heavy oil projects as well as the development of many techniques meant to squeeze out more petroleum out of the increasingly old and worn out conventional fields around the world.It is hard to estimate by how much the new expected price range for oil has increased recoverable reserves around the world, but it is quite clear that even though many people who were convinced that following the expected plateau in conventional oil may not like to admit to it, we are looking at hundreds of billions of barrels of extra recoverable oil.It comes at a price, including more environmentally damaging recovery techniques, a declining rate of energy return on energy invested, and the higher price needed to access these resources in the first place, but it is nevertheless a short-term lifeline given to the global economy.

I cannot stress enough however that it is important to remember that the explosion in unconventional liquid fuels supply, which we saw happen in the past decade or so, is not so much a technological leap event, but a supply/demand market event, driven by price.In other words, for us to move to the next big revolution in liquid fuels supply, we will likely need another market event to drive prices to the next level, which is likely to be somewhere in the $150-200 a barrel range (in today’s dollars), in order to unlock additional recoverable sources of oil, such as squeezing more out of old fields, or moving on to getting it out of Kerogen deposits, which sometimes are mistakenly refered to as oil shale. It is not even clear that we will ever be able to produce this resource because we may never be able to get a net gain in energy out of it.It is also unclear whether the global economy can support such a leap in prices.In the absence of another such price event, it is possible that the extra billions of barrels of oil we gained by the current price leap we experienced in the past decade will be all we will get.This means that in a decade or two, we will be back to a 2006 like scenario, and we will be just as unprepared to live in a world with stagnated or even declining liquid fuels supplies, and we will not have the benefit of another price increase to rely on either, because the economy cannot support it.A year after I wrote “Sustainable Trade”, I can say with certainty that my view on where we are headed in this regard remains intact.The ones continuing to preach imminent doom due to peak oil will see another year of disappointment, for they will be proven wrong again.With every such year however, we are getting closer to the year when they will be proven right, which like I said, will not likely happen for another decade at least.

On climate change & the environment:

2012 was a big year for environmentalists, in terms of winning the scientific debate in regards to issues such as climate change.The Koch brothers funded study that blew up in their face, the extreme weather, ranging from the severe droughts that hit the US and parts of Europe, to the strange occurrence of hurricane Sandy, all went in their favor.I am certain that they will continue to work towards total victory.As I stressed in my book, and also warned on my blog, the expectations of total victory will never materialize because they are losing the policy debate, by ignoring basic economic theory.They are doing much damage to the cause by not acknowledging the destructive effect that policies meant to make only some parts of the world shoulder the costs involved in dealing with climate change are extracting on the societies willing to help.These policy ideas are ignoring the free rider dilemma.As I often pointed out, it amounts to asking people in a town to voluntarily pay for the paving of public infrastructure such as sidewalks.No mayor in his/her right mind would ask for such a thing, yet the environmental movements in the west are asking for this exact aproach.It was this sort of misguided idealism which torpedoed last summer’s crucial Rio Earth summit.Many western countries, which are expected to jump to volunteer to tackle this problem at the expense of losing even more competitive edge to fast growing economically and in terms of their environmental footprint countries such as China and India did not even bother to send their main people.

After spending a year warning about the counterproductive and ineffective nature of this environmental stance, I can say with confidence that they will not abandon such self-defeating views, so 2013 will be yet another year, which will likely see more evidence of climate change surface, without action meant to accompany the problem to counteract it.People who instinctively feel that it is in their own self-interest not to encourage their governments to engage in self destructive unilateral schemes to tackle this problem will continue to believe that climate change and other environmental problems are not real, no matter how compelling the scientific evidence will be.People should not under-estimate humanity’s ability to engage in self-delusion, especially when it is needed to prevent being the sucker stuck with voluntarily paving the town’s sidewalks, for the greater good, but to the detriment of the volunteer.

In the absence of solid, and smart action, environmental and sustainability problems will continue to plague us.Some years will be better, others will be worse, but the long-term trend will prevail, and it will be bad.Some people may be tempted to claim that it may not be so bad, because after all climate change could potentially unlock virgin farmland in the Northern Hemisphere, so places like the US Midwest may be experiencing a drop in average yearly yields due to drought conditions, but will be offset by the crop growing line being extended further north.Having lived most of my life on the frontier of agricultural land's Northern edge, I have to say, some people need to get in touch with reality.It may indeed be the case that due to weather patern changes in the past few decades, farmland can potentially be claimed further North than one currently finds them.Problem is that farmers are not nomadic by nature.Farmers who give it up in the US Midwest are not likely to show up North of Winnipeg, Canada any time soon to claim virgin Northern land.One will most likely find them taking up new activities in Omaha, Des Moines, or other urban centers.Those who are older will fill the ranks of the retired.

The long-term trend towards disaster intact:

In 2012, the Euro did not collapse, petroleum and other liquid supplies continued to increase, The US housing market showed signs of life, more people were hired in the US, and more fired in Europe.China, India and other emerging powers continued to emerge, albeit at a slower pace.We kept relative peace on earth.No global-scale natural disasters with immediate consequences happened.It was overall not such a bad year.

2013, will probably be one where we will be able to say the same a year from now.It will not be a great year for most citizens of the “global village”, many will be the victims of the new slower pace rate of global growth.3% potential growth for the world simply cannot deliver for the middle class and the less fortunate, because we are living in a system geared towards funneling a disproportionate proportion of the gains to the global 1%.

Sometime between 2020 & 2030, liquid fuels growth rates will slow to somewhere between 0 & .5%, while the rate of energy return on energy invested will continue its gentle declining path, making it worse for the end consumer and for our prospects of continued growth.At that point, maximum potential global growth will likely slow to between 1.5% & 2.5%.2013 will be just another step towards that rough reality.It will be another year in which we will do nothing to prepare, because most still do not believe it will happen, simply because they are grossly misinformed, or under-informed by their own choice.The fact that we are already dealing with many negative consequences due to the downshift we experienced in the aftermath of the 2006 event of conventional crude plateau, is making it much harder to concentrate on longer term problems, since we need to deal with the immediate challenges we face.

Many thanks to those who read my book and the articles on my blog.I hope to be able to continue to produce work that people can find interesting and informative.

About Me

Author of book "Sustainable Trade". Book's central subject is a proposal for the elimination of all current bilateral, and multilateral trade agreements, in favor of a new tariff system meant to encourage sustainability. Double honors degree in History and Anthropology, and a B.A in Economics.